Alpha Metallurgical Resources, Inc.

greetings welcome to the alpha metallurgical resources fourth quarter 2022 result conference call at this time all participants are on the listen-only mode a question and answer session will follow the formal presentation please note this conference is being recorded i would now like to turn the conference over to your host emily o'quinn senior vice president investor relations and communications you may now begin thank you rob and good morning everyone

Before we get started, let me remind you that during our prepared remarks, our comments regarding anticipated business and financial performance contain forward-looking statements, and actual results may differ materially from those discussed. For more information regarding forward-looking statements and some of the factors that can affect them, please refer to the company's fourth quarter 2022 earnings release and the associated SEC filing. Please also see those documents for information about our use of non-GAAP measures and their reconciliation to GAAP measures. Participating on the call today are Alpha's Chief Executive Officer, Andy Edson, and our President and Chief Operating Officer, Jason Whitehead. Also participating on the call are Todd Muncy, our Chief Financial Officer, and Dan Horn, our Chief Commercial Officer. With that, I'll turn the call over to Andy.

Thanks, Emily. Good morning, everyone. As always, we will provide some additional detail on Alpha's fourth quarter results and our outlook for 2023 on the call today. But before we do that, I want to take a very quick look back at 2022. What a tremendous year it was. Our alpha team shipped 16.4 million tons of coal to customers in 26 countries around the world. We generated a record adjusted EBITDA of $1.7 billion and $1.3 billion of free cash flow, which allowed us to completely pay off our term load balance, making the company free of long-term debt. We invested significantly in our workforce through compensation, enhanced benefits, and incentive bonus opportunities for exceptional performance. We bought back over a half a billion dollars worth of alpha stock and returned another roughly $100 million to shareholders in the form of dividends declared in 2022. All of this was achieved at the same time the company posted record safety rates for NFDL, or non-fatal days lost, and performed better than the industry average in NFDL and total reportable incident rate, or TRIR. We were able to maintain 99.9% water quality compliance alongside our expanded focus on beyond compliance initiatives. Our mine rescue teams won a national championship last year with several other first place awards in both overall competition honors and technical category titles. On the environmental stewardship front, Alpha's Tom's Creek Impoundment and Tom's Creek South Deep Mine received the Metallurgical Coal Producers Association 2022 Best Active Refuse Impoundment Award and best completed underground mine award, respectively. The consistent focus on safety and environmental compliance is further bolstered by friendly competition through our best-in-class awards that allow our operating groups to compete against each other for top honors within their operational category. The winners were just announced, and we're proud to congratulate the Glen Alum Tonal Mine, Marfork Transfer System, Kingston South Surface, or the Bishop Mine, the Kepler Processing Plant, and the Marmot River Doc on their selection as best in class for 2022. Within the last several months, we also successfully completed an executive leadership succession plan. In August, after many years as senior vice president and controller, Todd Muncie stepped into the chief financial officer position. At year end, David Stetson moved into the executive chairman role, and I took over as CEO. Jason Whitehead is continuing as our Chief Operating Officer, and he's expanded his leadership role to include serving as Alpha's President as well. All of these changes have gone smoothly, and together alongside Roger Nicholson and Dan Horn, Jason, Todd, and I are hard at work to make 2023 another great year for the company. With nearly two months of this calendar year under our belts now, I remain cautiously optimistic about the full year's prospects. As we said in the release this morning, the geological and transportation issues that dampen our fourth quarter results appear to be largely behind us, thanks to the hard work of our various operations and logistics teams. We were not satisfied with how we finished this year, because we do hold ourselves to a very high standard. And at that end, we're pressing ahead with an ambitious year from a production and sales perspective, and the team is performing very well so far against those goals. Due to sustained global metallurgical coal supply tightness, Coal markets are continuing to show strength with the key US East Coast indices we follow moving upward over the last few weeks and the Australian PLV approaching $400 again. Together with the positive rail performance we've been experiencing recently, the foundation for a very good year seems to be in place. While neither coal markets nor rail performance are within office control, there are key steps we are taking to manage our own destiny to the degree that we can. In looking at some of the most challenging obstacles of the past few years, Three broad areas are at the top of mind, supply chain, trucking, and labor. These challenges are by no means unique to Alpha, but I believe we've taken a uniquely Alpha approach to mitigating them. Jason will share more in his remarks, but Alpha's subsidiary, Maxim Rebuild, is vertically integrated with two new areas of focus, Maxim Manufacturing and Maxim Transportation. I see both strategic actions, making some of our own machine parts and trucking some of our own coal, as examples of the resilient alpha mentality, which sometimes says, we'll just do it ourselves. We pride ourselves on finding solutions to problems, and I believe these two new departments will prove beneficial to the company in the immediate near term, but also especially in the years to come. Turning now to labor, the third challenge I listed. We invested significantly in our workforce to retain the exceptional professionals already a part of our team and to attract others to join. We've also invested in training, with nearly 200 employees completing our Red Hat Apprentice Monitor Program, and another 50 completing electrical training within 2022. As a result, we saw our overall turnover rates ticking downward as the year developed, and we seek to continue that progress through 2023. We plan to continue building on this momentum across all three of these areas, which I believe will allow Alpha to be better prepared for whatever the rest of the year may bring. Strategically, as we look ahead to priorities for the near term, We will continue to protect the balance sheet, maintaining the cash and liquidity targets we've discussed. For free cash flow above these levels, we remain committed to share repurchases as the most value-creating focus for our capital return program. The board just increased the share repurchase authorization by another $200 million, bringing the total authorization up to $1.2 billion. Given the significant fluctuation in the indices over the last 12 months, we're reminded of the cyclicality of our industry and the ongoing need to manage costs. This is true in any pricing environment, but it's especially important in times where the indices moderate, leaving less for us to capture margin that could fuel the operational and capital return priorities we've set. Therefore, we remain committed to cost management to ensure that we are well positioned for any pricing environment that may develop. In short, we're actively managing alpha to control what we can and mitigate what we can't. And we remain excited about our market share production capabilities and solidifying our role as an industry leader. So with that, I'll turn it over to Todd for discussion of our financial results. Thanks, Andy. We preannounced our financial results due to the previously discussed geological and transportation challenges that dampened our fourth quarter 2022 results in what was otherwise an exceptional year, as Andy mentioned. Fourth quarter adjusted EBITDA was $248 million, which was down from our third quarter level of $296 million. We sold 3.9 million tons in the quarter, 3.8 million of which came from our MET segment and 100,000 tons from the all-other category. Our quarter-over-quarter realizations improved slightly for the MET segment as a whole, with an average realization of $186.29 for the fourth quarter as compared to $184.31 in Q3. Export met tons priced against Atlantic Indices and other pricing mechanisms in the fourth quarter realized $196.88 per ton, while export coal priced on Australian Indices realized $183.59. Our fourth quarter realization for our metallurgical sales was a total weighted average of $190.94 per ton, essentially flat against the prior quarter's $191.17 per ton. Realizations in the incidental thermal portion of the MET segment increased quarter over quarter, coming in at $146.24 in Q4 as compared to an average of $119.69 per ton for Q3. This higher realization reflects the increase in thermal pricing for the period when the tons were sold. Fourth quarter realizations in the all-other category were $126.10 per ton, up from $109.27 per ton for the third quarter. Again, a reflection of the temporarily improved pricing environment for thermal coal, which has since fallen off. Cost of coal sales within our MET segment increased to $112.97 per ton, up from $104.86 per ton in the third quarter. This increase includes higher than budgeted labor costs due to incentive bonuses paid to employees across the organization to reward our team for a year of excellent performance. Cost of coal sales in the all-other category rose to $80.76 per ton, up from $67.48 per ton in the third quarter, due again in part to high labor costs, but also higher sales-related costs for thermal coal, resulting from an improved pricing environment, as well as the impacts of late-stage mining at our slab-count mine. SG&A, excluding non-cash stock compensation and non-recurring items, increased to $19 million in the fourth quarter, as compared to $13.6 million in the third quarter. The increase is primarily attributable to incentive bonuses paid within the quarter, as well as higher professional fees. Fourth quarter CapEx was $61 million, up from $33.3 million in Q3. Moving to the balance sheet and cash flows, as of December 31st, 2022, we had $348 million in unrestricted cash and short-term investments, down from $404.4 million at the end of the third quarter. We had $93.1 million in unused availability on our ABL at the end of the year. Alpha had total liquidity of $441.1 million as of the end of December. which is net of the $127.8 million in share repurchases during the quarter and $84.7 million in deposits in Q4 related to the special and quarterly dividends paid in early January. By comparison, total liquidity at the end of the third quarter was $495.5 million. Cash provided by operating activities decreased quarter over quarter to $185 million in Q4 as compared to $497 million in Q3. In total, Alpha generated $1.48 billion in cash from operating activities in 2022. As of December 31st, our ABL facility had no borrowings and $61.9 million of letters of credit outstanding, down slightly from the prior quarter. We are pleased with our committed position for 2023 sales. 38% of our metallurgical tonnage in our MET segment is committed and priced at the midpoint of guidance at an average price of $195.89. Another 38% of our 2023 MET tonnage at the midpoint is committed but not yet priced. The thermal byproduct portion of the MET segment is 52% committed and priced at an average price of $119.79. And we are almost fully committed and priced 97% for this year in our All Other category, with an average price of $94.08. Looking now to our dividend program, Alpha's board has declared a quarterly cash dividend of $0.44 per share, an increase from the prior quarter's $0.41.8 per share, which will become payable on April 3rd for holders of record as of March 15th. In terms of share repurchases, we have continued to buy back shares of our common stock, and in the fourth quarter of 2022, we repurchased 813,000 shares at a cost of $128 million. Since the beginning of the program through the end of January 2023, we have spent approximately $560 million to acquire 3.8 million shares of Alpha's common stock at a weighted average price of $145.54 per share. The outstanding share count has been reduced by nearly 18% from the time the program began. As of January 31, 2023, the number of common stock shares outstanding was approximately 15.3 million. As Andy mentioned earlier, Alpha's board increased the buyback authorization by $200 million, bringing our total authorization for share repurchases to $1.2 billion. Before I hand the call over to Jason, I want to make a quick comment on the recent actions of the Department of Labor and their newly proposed regulations related to collateral requirements to secure self-insured federal black loan obligations. If adopted, the new regulations could substantially increase alpha's required collateral. Under the DOL's proposed 120% minimum collateral requirement, we estimate we could be required to provide approximately 80 to $100 million of collateral to secure certain of our Black Lung obligations. While a portion of this could be covered by third-party bonding or other non-cash arrangements, we will continue to monitor this process and its potential impact to our balance sheet. I will now turn the call over to Jason for some details on operations. Thanks, Todd. Good morning, everyone. I want to start with a shout-out to the 2022 Best in Class winners. Y'all showed great leadership and set the bar even higher for this year's competition. Congratulations again to Glen Island Tunnel for winning the underground mine category. Marfork for winning the underground belt transfer system category. Kingston South Surface Mine, also known as Bishop, for winning the surface mine and high wall miner division. And congratulations to Kepler for achieving top honors in the processing plant category. and Marmet River Dock for our best loadout facility. We're all proud of our best-in-class winners. From an operations perspective, the end of 22 was exceptionally busy. As we've disclosed, there were some geologic and transportation challenges that hampered our fourth quarter results. But we've taken a number of steps to mitigate those challenges. Based on January numbers and what we're seeing so far in February, I believe these issues are mostly behind us. One way of looking at this is through our inventory levels at Dominion Terminal Associates Facility in Newport News, Virginia. As you know, roughly two-thirds of our MET production is funneled through our DTA facility. Due to a number of factors, including supply chain shortages, transportation availability, power outages and interruptions, the holiday schedules, and other timing concerns, we hit an inventory trough at DTA of approximately 47,000 tons in December. Since then, we've grown that about tenfold to a more appropriate level of working inventory of shipable coal that we expect to ship to customers in the coming weeks and months. This timing pairs up nicely with the movement and the indices that with the Aussie PLV moving up roughly 34% over the last two months, and Platts' U.S. East Coast lowball moving up 25% over the same time period. One of the highest priorities for us as a management team is to proactively protect our ability to continue the basic operations of our business. Most, if not all, of our businesses went through the dramatic supply chain issues stemming from COVID, but as some issues resolved, it became clear to us that others were more structural and may not resolve themselves. Therefore, we decided to step in and vertically integrate our Maxim Rebuild Division, which has historically worked to rebuild underground mining equipment. Now, two new departments have been created, Maxim Manufacturing and Maxim Transportation. We established these two new aspects of the company to address very real problems within the supply chain for certain equipment parts, like gear cases, and in the trucking of our coals to preparation plants and loadouts. In the case of Maxim Manufacturing, we acquired certain assets of industrial plating and machine at Bluefield, West Virginia. We have worked with them for some time on essential mining equipment components, and now we have bought these operations in-house to optimize our parts supply. Turning to the new trucking division, Maxim Transportation. As we analyze some of the bottlenecks in our ability to efficiently get our coal from point A to point B, we recognized a significant opportunity to acquire our own trucks and run our own logistics planning to best utilize the transportation options available. Over the course of a few small transactions, Alpha now has acquired roughly 75 on-road coal trucks, and we employ a team of drivers to move our coals from the mines to the preparation plants, loadouts, and barge facilities. While it's natural to experience a few hiccups in the early days of acquisitions like these, Both Maxim Manufacturing and Maxim Transportation are meeting our expectations and present further value-added opportunities as we look ahead to how we might use additional integrations to complement these efforts. I want to again welcome these new team members to Alpha. I want to thank the current employees who have worked tirelessly to get both of these ambitious goals accomplished in a very short period of time. Lastly, I want to briefly mention our newest mine currently in development. Rolling Thunder, this is a highball mine in West Virginia that we expect to take its first cuts this summer. We are excited about the possibilities this mine will bring due to its proximity to our existing operations, and we'll keep you updated on the progress as we move ahead. With that, I'll turn the call over to Dan for some additional information on the markets and our sales efforts.

Thanks, Jason, and good morning, everyone. The global economic landscape hasn't been especially favorable over the last several months, with metallurgical coal markets being influenced by prolonged wartime impacts in Asia and Europe as a result of Russia's invasion of Ukraine. Slowing steel production across the world and persistent inflationary pressure have also contributed to current market dynamics. Heavy rain and flooding in Australia interrupted coal production and exports within the fourth quarter, And the recent earthquake in Turkey has also been extremely unfortunate development. China's December 2022 reversal of its years-long strict zero COVID policy and its decision to ease its ban on Australian coal are two additional factors that may shape metallurgical market trade flows in the coming months. Given all the negative news across the world and the poor economic indicators, coal markets appear to be somewhat of an anomaly with indices moving upward significantly in recent weeks. Specifically, looking at fourth quarter price movements for metallurgical coal, the Australian premium lowball index increased from $270.50 per metric ton on October 1st to $294.50 per ton at year end. The U.S. East Coast lowball index increased from $270 per metric ton on October 1st to $278 per metric ton at the end of the fourth quarter. The U.S. East Coast High Vol A Index moved from $287 per metric ton at the start of October to $275 per metric ton at quarter close. U.S. East Coast High Vol B fell from $284 per metric ton to $274 on December 31st. In recent weeks, all of the aforementioned indices have increased from their year-end levels. As of February 21st, The Australian premium low-ball index was $388 per ton, and the U.S. East Coast low-ball index was at $342. The U.S. East Coast high-ball A index was at $325 per metric ton, while the U.S. East Coast high-ball B was at $310 per ton. While many of the metallurgical markets are assessing the potential impact of China's decision to again allow the import of Australian coal, as well as the country's reversal of its zero-COVID policy, Alpha believes that we are well positioned regardless of those two key changes in China's approach. As you know, Alpha opportunistically sold roughly 2 million tons of coal into China in 2021, but it has never been a key market for us, and we are not counting on business in China for our future plans. Certainly, if China engages in significant industrial and manufacturing growth, that will serve as a positive catalyst for the metallurgical coal industry broadly. However, there is speculation among some economists about the kind of growth that China may undertake, with some suggesting it may hinge more closely on services as opposed to infrastructure investment. Time will tell, but we remain confident in our approach regardless of that outcome. Turning now to the thermal coal market, where pricing has very significantly fallen off from the highs of last year. The API2 index started the fourth quarter of 2022 at $310.85 per metric ton, and ended the year significantly lower at $190.50 on December 30th. The softening trend has continued through the first months of 2023, with this index at $135.85 per metric ton as of February 21st. I will close as I usually do with a quick comment about rail performance, which has been very good of late. We appreciate the efforts of the railroads to address their labor shortages, which appear to be largely resolved. Alpha has seen performance at or close to pre-pandemic levels in recent weeks, and we look forward to continued positive collaboration with our railroad partners. And with that, operator, we are now ready to open the call for questions.

Thank you. At this time, we'll be conducting a question and answer session. If you'd like to ask a question, please press star 1 on your telephone keypad. One moment, please, while we poll for questions. Our first question comes from Lucas Pipes with B. Reilly Securities. Please proceed with your question.

Thank you very much, Operator, and good morning, everyone. First off, I do like the name Rolling Thunder, and I think it would be a good name for your share repurchase program as well. So my first question is, in terms of cost inflation, could you comment a bit on what you would put into the cyclical bucket, what you would put into the more structural bucket. I assume labor, for example, could be a little bit more structural, but would really appreciate your perspective on this. Thank you very much.

Hey, Lucas. It's Andy. And I do love your idea. If we're going to stick a label on the repurchase program, that is pretty good. I think from a cost perspective, and I'll let Jason throw in any extra color, there are Both the labor and the supplies area seem to be a little bit sticky as far as how long they may stick around. Naturally, we always feel like we're at the tail end of cyclicality. The market comes down and then it takes a while for that to flush through to the cost side for us. Again, we have such labor constraints. It makes it rather challenging to do too much in that regard until things do come off a bit. For the near term, it feels like the cost structure kind of is what it is, but we'll just have to wait and see where the markets go. Again, the volatility that we're seeing is not really being helpful as far as planning, but for right now, I think we're just expecting kind of a static view on cost, outside of the sales-related, obviously. But Jason, anything you want to add? Well said, Andy. I think that we are finding opportunities to reduce costs with our you know, with our new acquisitions that we spoke about. And let me be really clear, the primary driver of those acquisitions was for parts and transportation availability. And then secondly, you know, we'll be looking to streamline things and do things more efficiently than they've been done in the past. So, you know, look forward to reporting out on that in the future.

Thank you very much for the color. And then just leads a little bit into a higher level question. And when I hear your comments about bonding requirements for Black Lung, for example, or the acquisition on the equipment side, I also hear benefits of scale. And obviously, you have tremendous scale already. But does this make the case for more M&A in the space? Curious to get your perspective on that.

Yeah, I think we've been talking about this for a few years now where consolidation does make sense. The problem is just the way the sector is currently structured. It's really hard to value each other, particularly as related to how we are currently valued by the market. So if you look at current spot pricing and you apply that to alpha for four years, you're looking at something probably sub two times on EBITDA. And that just seems extremely cheap. And so you have to compare that to potential synergies and scale economics for doing transactions, which will obviously be offset by integration risk. I think it's really difficult to justify any M&A at these current levels, any sizable M&A. I mean, naturally, we're always, I think we said before, we have a door is always open approach to smaller bolt-on things. But I think right now, generally speaking, we're The main acquisition we're focused on is acquiring more alpha stock.

That's super helpful. Thank you very much, Andy. And then final question, turn it over. With the 61% of met coal that is still left to be sold, could you provide a quality breakdown? Maybe I missed that and maybe just put a bow on it. What would you expect... those tons to garner back at the mind gate at today's market prices. Thank you very much.

Sorry, Lucas, were you asking about the uncommitted?

Correct, yes. I think you have 39% committed, so the 61% that are uncommitted.

I'll let Dan throw some color here, but unfortunately, we've locked up the crystal ball today, so making guesses on that is virtually impossible. I think generally speaking, we probably don't have too much of a quality differential among the spread of what we've booked versus what we've not booked. But I'll let Dan speak more to that.

Yeah, good morning, Lucas. I'd say across the quality spectrum, high vol, mid vol, we still have some of those tons to place. We'll find our opportunity. The market... I'll make a comment on that. I will say that a lot of our larger customers have locked up more term business than they have in the past, especially in Western Europe. That's due to the unavailability of Russian coals flowing into Europe for steelmaking. So we see good demand for our coals, including highballs, into Europe the rest of the year. And then the rest of it, we have many customers who just roll out and buy a quarter at a time. you know, on a regular cadence there. So we'll sell and ship those tons, you know, pretty regularly through the year. And, you know, you can do the math as well as I can. You know, you take the indices today and you back that. You asked about the price of the mine. You know, today's pricing, if you go back to the mine, you're in the 235 to 250 range today. You know, I'm not saying that's what we'll achieve on every ton of coal, but that's where they sit today.

Very helpful. Really appreciate all the color. Great work, and yeah, continue. Best of luck.

Thanks, Luke. Our next question is from Lance Vitanza with Cowan and Company. Please proceed with your question.

I've been on for Lance. My first question is, given that 38% of your expected MET output for the year is already priced, Are you sure if this is largely set for delivery in the first and second quarter of the year, or is it spread throughout all four quarters?

Well, the domestic portion is rateable through the year. Some of our contracts are rateable through the year, and some are a little more front-end loaded. It's literally all of the above.

Okay, all of the above. Okay. All right. Can you give us a bit, the $2 incentives per ton for discretionary incentives to employees, was this a one-time occurrence just given the challenges that were presented in the MIS during the fourth quarter, or is this something that we can expect going forward?

Yeah, this was something where, again, we had to step back as a management team and look at the year that we had and combine that with the the staffing environment that we're living in. It felt appropriate to grant some of these bonuses. Some of these are just part of the standard program. There was some discretion that we also utilized. This is one of those things where if you have a record year, giving a portion of that to the employees to reward them for just a tremendous amount of effort and high quality of work seems like the right thing to do. I think it also just shows to the marketplace that we're very much excited to pay employees for good performance. And that seems to be helpful when it's time to find more employees, to be honest.

Yes, I agree. That's a good strategy. Great. In terms of the carryover CapEx that's going into 23, is this primarily going to be spent in the first quarter, and therefore we should expect CapEx in the first quarter to be the highest of the year?

No, I think this generally, it probably, I think it'll probably end up being pretty ratable throughout the year because, again, supply chains have not completely unclogged. And so, you know, some of our original plans for 2023 may also, you know, start sliding into 24. So generally speaking, it's kind of a broad mix of different items of equipment or rebuilds or whatever the case may be. So I don't know. It's highly, highly unlikely that it hits in Q1 or really in the first half, I think it'll be kind of a peanut butter spread.

Understood. And the last one for me. I know that rolling thunder mine is still in process, but how many additional tons can we expect on a national basis to come out for that mine to yield?

Hey, this is Jason, and I'll take that. For this year, we plan on, as we said, you know, taking development cuts starting in the summer. And, you know, we expect south of 200,000 tons this year. And it's really more about a sustaining mine, you know, for some other operations with the ability to bolt on. And, you know, I can say that this mine's capacity would be in the million ton a year range.

So then that 200 expected tonnage. Yes. 200,000. Yeah, is that already baked into the guidance, or is that something that can, you know, be on top of?

Yeah, it's in the guidance for this year, and it's, like I said, it really hits its stride in 2024. Understood.

Okay, thank you.

Thank you.

As a reminder, if you'd like to ask a question, please press star 1 on your telephone keypad. One moment while we poll for additional questions. Our next question is from Nathan Martin with the Benchmark Company. Please proceed with your question.

Hey, good morning, everyone. Thanks for taking my questions. Hey, Nate. Jason, just real quick on Rolling Thunder again. I think you said high vol mine. I appreciate the other color you just gave. Is that going to be an A quality product or a B quality product or somewhere in between?

Yeah, Nate, it's a good B coal. I mean, it's a good coke and coal. It's got good properties.

Okay. Great. Appreciate that color. And then I want to come back to the cost side. MET segment cost time for guidance maintained at 106 to 112. You know, you guys put that target out there, obviously, before the run-up of MET prices we've seen in the last couple months. So just curious if you could give us an idea of what MET prices you assume in that range, and if you have any kind of sensitivity to the MET price, that would be great.

Yeah, we typically don't throw that out there, but you can kind of figure about the time that we put that guidance out. We were using the current strip or the future strip to kind of inform where we thought 23 was going. I don't recall off the top of my head where it was at that point in time, but that was where the math was going. You know, probably, I don't know, 250-ish, maybe 270 range, something in that ballpark for Aussie PLV. And to the degree that this market continues, naturally, the impact from sales related. And as Jason mentioned, we are seeing some improvements from other portions of direct costs at the mines, along with some productivity improvements that we're seeing that will offset some of that. But if the market holds, we may see some adjustments to that number throughout the year. But at this point, we're still comfortable with the range as it was published.

Appreciate those thoughts. Andy, it would also be great to get you guys' thoughts on the cadence of shipments as we move through the quarters this year. I mean, should we expect things to kind of improve quarter of a quarter here in the first quarter to a more normal run rate as logistics hopefully improve, or will there still be some time to kind of ramp up from those fourth quarter challenges? And then could you also remind me maybe how to think about the timing of the other thermal shipments as well, given slab can't do to mine out, I believe.

Hey, Nate, this is Dan. I'll answer the last one first. The cadence on the thermal should be fairly roundable through the year. It shouldn't be any, you know, well, let me say this. It'll go up in the summer months due to the burn and come down a little bit in the shorter months, as usual. Nothing unusual there, but generally roundable. And with regard to the MET shipment cadence, again, I mentioned earlier, domestic will be flat through the year. We have some domestic business that doesn't begin until the lake season opens here in April, so probably a little higher there. And as far as seaborne, the coals that we have under contract are generally going to be rateable. Hopefully we'll see continued uptick in the blast furnaces relighting here over the next several months. We kind of feel, at least today, that the worst is behind us there, that steelmaking growth. should continue through the year. Certainly, we believe it will in India and some other markets.

Great. Appreciate those comments there, Dan. And then maybe just one final one. A couple mentions of labor constraints within the industry. You guys are expecting to kind of grow your production this year. Do you feel confident getting to those levels with your current labor force? I mean, are you going to necessitate any additional GMs or crews or overtime, just would be great to get your thoughts.

Hey, this is Jason. I think that generally things have moderately improved, I would say. You know, we talked about our, you know, training program that we initiated, I guess, about 18 months ago. And, you know, we continue to bring fresh new faces into the industry. And we also have some minds that are retiring now. you know, that are larger and kind of long in the tooth. And, you know, as we transition, you know, those miners into brand-new operations, you know, that are smaller and, frankly, take less employees to maintain, you know, I feel like we're in relative pretty good shape to where we've been.

Great. I'll leave it there. Appreciate the time and information, guys, and best of luck in 23. Thanks, Dave.

We have reached the end of the question and answer session. I will now turn the call over to Andy Edson for closing remarks.

Thank you, operator, and thanks to everyone who dialed in or logged in online for the call. We appreciate your interest, and we hope everyone has a great day.

This concludes today's conference. You may disconnect your lines at this time, and we thank you for your participation.